Some of Casino's unsecured bonds came under further pressure on Tuesday after its holding company Rallye said on Monday it had started court proceedings to secure a grace period while it negotiates a debt deal.
The heavily indebted French retailer's unsecured bonds maturing in 2025 and 2026 dropped by more than two cents on the euro, Tradeweb data showed, going deeper into distressed levels, in a sign that investors are likely to have to take a hit.
The bonds are trading at around 18 cents on the euro.
Casino has around €3 billion of debt maturing in 2024 and 2025.
The company, headed and controlled by veteran entrepreneur Jean-Charles Naouri, is striving to find a way out of its financial woes. Earlier this month, S&P Global Ratings cut its rating on Casino to CCC-, putting further pressure on the company, whose shares are down by around 30% so far in 2023, having fallen 58% in 2022.
Casino's creditors are due to respond by 1500 GMT on Tuesday to its request to give their consent to start a pre-insolvency process as it considers proposals from rivals to improve its financial position.
Casino shares were suspended earlier on Tuesday at the request of the company and pending a statement.
Two Potential Deals
The company had said on April 24 it was considering asking for a court-appointed conciliator to oversee discussions with bank creditors and bondholders over two potential deals.
Czech billionaire Daniel Kretinsky, Casino's second-biggest shareholder, has offered to take control of the retailer through a €1.1 billion capital increase, challenging an earlier proposed tie-up between Casino and smaller retailer Teract.
Some investors said time is up for Casino's largest shareholder, veteran entrepreneur Naouri, who has been at the helm since 2005.
They said they view a deal with Kretinsky as a positive as it would offer Casino the capital and the retail network it requires to re-launch the business, even if the Czech billionaire's proposal is contingent on a debt reduction, which means creditors would not recover all of their money.
Other investors said Casino's value is sufficient to repay all of its outstanding debt when it comes due. They favour putting the whole group up for sale as its current structure is complex.
Some investors have also proactively hired advisers to seek more favourable terms under the potential deals.
News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.